<PAGE>
---------------------------------------------------------------------

U.S. Securities and Exchange Commission
Washington, D.C. 20549
-------------------------------------------

                                Form  10-Q

(Mark one)

-------------------------------------------
[x]  Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the quarterly period ended September 30, 1998
-------------------------------------------

or
-------------------------------------------

[  ]  Transition Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the transition period from     to
-------------------------------------------

Commission File Number 1-8612


                           Ameritech Corporation
                                     
                                     
                                           
                                           -----------------------------
                                           A Delaware Corporation
                                           -----------------------------
                                           30 S. Wacker Drive
                                           Chicago, Illinois  60606
                                           -----------------------------
                                           I.R.S. Employer Identification
                                           Number 36-3251481
                                           
                                           
                                           Telephone number   (800) 257-0902





We have filed all reports required to be filed by Section 13 or 15 (d) of
the Securities Exchange Act of 1934 during the preceding 12 months, and
have been subject to those filing requirements for the past 90 days.

Yes     X   No
      ----     ----

At October 31, 1998, 1,103,248,008 common shares were outstanding.


<PAGE>
                             TABLE OF CONTENTS
                                     
                                  PART I
                                     
ITEM                                                             Page
----                                                             ----

 1.  Financial Statements
       Condensed Consolidated Statements of Income for
          the three and nine months ended
           September 30, 1998 and 1997                               1
  
  
       Condensed Consolidated Balance Sheets as of
          September 30, 1998 and December 31, 1997                   2
  
  
       Condensed Consolidated Statements of Cash Flows for
          the nine months ended September 30, 1998 and 1997          3
  
  
       Notes to Condensed Consolidated Financial Statements         4-7
  
  
 2.  Management's Discussion and Analysis of Financial
        Condition and Results of Operations                        8-27
  
  
 3.  Quantitative and Qualitative
        Disclosures about Market Risk                              28
  
                                     
                                  PART II
                                     
  
 6.  Exhibits and Reports on Form 8-K                              29
 
     Glossary                                                    31-32
  
                                     
                                     
                                     i
                                     

<PAGE>

                       Item 1 - Financial Statements
                       -----------------------------
                  AMERITECH CORPORATION AND SUBSIDIARIES
                                     
                CONDENSED CONSOLIDATED STATEMENTS OF INCOME
              (Dollars in millions, except per share amounts)
                                (Unaudited)
                                     
                                     
                                   Three Months Ended   Nine Months Ended
                                     September 30          September 30
                                    ---------------       ---------------
                                    1998       1997       1998       1997
                                    ----       ----       ----       ----

Revenues
  Local service................. $ 1,768    $ 1,661    $ 5,189    $ 4,898
  Interstate network access.....     607        606      1,851      1,875
  Intrastate network access.....     126        153        435        457
  Long distance service.........     368        335      1,050      1,038
  Cellular, directory and other.   1,421      1,251      4,187      3,583
                                 -------    -------    -------    -------
                                   4,290      4,006     12,712     11,851
                                 -------    -------    -------    -------
Operating expenses
  Employee-related expenses.....   1,054      1,004      3,108      2,956
  Depreciation and amortization.     687        621      2,022      1,850
  Other operating expenses......   1,342      1,271      3,893      3,677
  Restructuring charge..........      --         --        104         --
  Taxes other than income taxes.     144        148        453        453
                                 -------    -------    -------    -------
                                   3,227      3,044      9,580      8,936
                                 -------    -------    -------    -------
Operating income................   1,063        962      3,132      2,915
Interest expense................     140        123        462        371
Other (income) expense, net.....    (83)      (127)    (1,761)      (178)
                                 -------    -------    -------    -------
Income before income taxes......   1,006        966      4,431      2,722
Income taxes....................     361        353      1,586      1,036
                                 -------    -------    -------    -------
Net income...................... $   645    $   613    $ 2,845    $ 1,686
                                 =======    =======    =======    =======
Earnings per common share*
 Basic..........................   $0.58      $0.56      $2.58      $1.53
                                 =======    =======    =======    =======
 Diluted........................   $0.58      $0.56      $2.56      $1.53
                                 =======    =======    =======    =======
Dividends declared per common
 share*.........................   $0.30    $0.2825      $0.90    $0.8475
                                 =======    =======    =======    =======
                                     
                                     
*Per share amounts for 1997 have been restated for two-for-one stock
 split effective December 31, 1997.
                                     
                                     
                                     
                                     
                                     
See Notes to Condensed Consolidated Financial Statements.

                                     
                                     1
                                     


<PAGE>

                 AMERITECH CORPORATION AND SUBSIDIARIES
                  CONDENSED CONSOLIDATED BALANCE SHEETS
                          (Dollars in millions)
                                    
                                         Sept. 30, 1998  Dec. 31, 1997
                                         --------------  -------------
                                           (Unaudited)   (Derived from
                                                            Audited
                                                           Financial
                                                          Statements)
ASSETS

Current assets
 Cash and temporary cash investments........   $   381       $   239
 Receivables, net...........................     3,003         3,078
 Installment receivable from
   TCNZ share sale..........................       870            --
 Material and supplies......................       349           290
 Prepaid and other..........................       664           942
                                               -------       -------
                                                 5,267         4,549
                                               -------       -------
Property, plant and equipment...............    36,108        34,391
 Less, accumulated depreciation.............    21,964        20,518
                                               -------       -------
                                                14,144        13,873
                                               -------       -------
Investments, primarily international........     4,815         1,751
Other assets and deferred charges...........     5,617         5,166
                                               -------       -------
Total assets................................   $29,843       $25,339
                                               =======       =======
LIABILITIES AND SHAREOWNERS' EQUITY
Current liabilities
 Debt maturing within one year..............   $ 1,229       $ 3,036
 Accounts payable...........................     1,955         1,955
 Other......................................     3,240         2,250
                                               -------       -------
                                                 6,424         7,241
                                               -------       -------
Long-term debt..............................     7,013         4,610
                                               -------       -------
Deferred credits and other long-term liabilities
 Accumulated deferred income taxes..........     1,302         1,150
 Unamortized investment tax credits.........       121           140
 Postretirement benefits
   other than pensions......................     2,961         2,965
 Other......................................     1,230           925
                                               -------       -------
                                                 5,614         5,180
                                               -------       -------
Shareowners' equity
 Common stock, par value $1; 2.4 billion
   shares authorized, 1.177 billion issued in
     1998 and 1997..........................     1,177         1,177
 Proceeds in excess of par value............     5,475         5,313
 Reinvested earnings........................     6,043         4,190
 Treasury stock, at cost (76 million shares
   in 1998 and 74 million shares in 1997)...    (1,601)       (1,645)
 Deferred compensation......................      (114)         (190)
 Accumulated other comprehensive income.....      (188)         (537)
                                               -------       -------
                                                10,792         8,308
                                               -------       -------
Total liabilities and shareowners' equity...   $29,843       $25,339
                                               =======       =======

See Notes to Condensed Consolidated Financial Statements.

                                    
                                 Page 2
                                    


<PAGE>

                 AMERITECH CORPORATION AND SUBSIDIARIES
             CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                          (Dollars in millions)
                               (Unaudited)
                                                   Nine Months Ended
                                                     September 30
                                                     ------------
                                                  1998         1997
                                                  ----         ----
Cash Flows from Operating Activities
Net income...................................    $2,845       $1,686
 Adjustments to net income
  Restructuring charge, net of tax...........       64           --
  Depreciation and amortization..............    2,022        1,850
  Deferred income taxes, net.................      145           63
  Investment tax credits, net................      (19)         (24)
  Capitalized interest.......................      (20)         (19)
  Change in accounts receivable, net.........       75           95
  Change in material and supplies............      (91)         (64)
  Change in certain other current assets.....     (161)         (83)
  Change in accounts payable.................       --           14
  Change in certain other current
    liabilities..............................    1,034          160
  Change in certain other noncurrent
    assets and liabilities...................     (684)        (284)
  Gain on sale of Sky Network
    Television Limited.......................       --          (52)
  Gain on sale of TCNZ shares................   (1,543)          --
  Other operating activities, net............       (8)          18
                                               -------      -------
Net cash from operating activities...........    3,659        3,360
                                               -------      -------
Cash Flows from Investing Activities
Capital expenditures.........................   (2,126)      (1,829)
Additional investments, principally
 Tele Danmark................................   (3,182)        (101)
Proceeds from repayment of GEIS note.........      473           --
Proceeds from TCNZ
 share repurchase............................       --          118
Proceeds from sale
 of TCNZ shares..............................    1,078           --
Proceeds from sale of Sky Network
 Television Limited..........................      --            52
Other investing activities, net..............       20          (24)
                                               -------      -------
Net cash from investing activities...........   (3,737)      (1,784)
                                               -------      -------
Cash Flows from Financing Activities
Net change in short-term debt................   (1,565)         440
Issuance of preferred stock by subsidiary....      322          250
Issuance of long-term debt...................    2,500           --
Retirement of long-term debt.................     (251)        (306)
Dividend payments............................     (992)        (933)
Proceeds from reissuance of treasury stock...      338          249
Repurchase of common stock...................     (133)        (601)
Other financing activities, net..............        1           28
                                               -------      -------
Net cash from financing activities...........      220         (873)
                                               -------      -------
Net increase in cash and temporary
 cash investments............................      142          703
Cash and temporary cash investments,
 beginning of period.........................      239          145
                                               -------      -------
Cash and temporary cash investments,
 end of period...............................   $  381       $  848
                                               =======      =======

See Notes to Condensed Consolidated Financial Statements.
                                    
                                 Page 3
                                    

<PAGE>

               AMERITECH CORPORATION AND SUBSIDIARIES
                                  
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  
                         SEPTEMBER 30, 1998
                                  

Note 1:  Preparation of Interim Financial Statements

We have prepared the unaudited condensed consolidated financial
statements in this report by following Securities and Exchange
Commission rules that permit reduced disclosure for quarterly period
reports.  These financial statements include estimates and
assumptions that affect the reported amounts of assets and
liabilities and the amounts of revenues and expenses.  Actual amounts
could differ from those estimates.  We believe these statements
include all adjustments necessary for a fair statement of results for
each period shown.  We believe our disclosures are adequate to make
the presented information clear.  You should read these financial
statements in conjunction with the financial statements and notes
included in our 1997 Annual Report on Form 10-K and the quarterly
reports on Form 10-Q previously filed in 1998.

When reading these financial statements, you should be familiar with
the terminology unique to our business.  We have defined a number of
terms in the glossary on pages 31 and 32.


Note 2:  Sale of Investment in Telecom Corporation of
         New Zealand Limited

In April 1998, we sold substantially all of our stake in Telecom
Corporation of New Zealand Limited (New Zealand Telecom or TCNZ) in a
global stock offering.  We will receive payment for the sale in two
installments.  The first payment was received in April 1998 and the
second is due by March 31, 1999.  At the time of the first
installment payment, we irrevocably transferred our shares to a
trustee, which is holding the shares in trust for the purchasers
until the final installment is paid. We have retained a security
interest in the shares and each purchaser remains personally liable
until the final installment payment is received.  The purchasers will
receive all ordinary dividends in the interim period. The trustee
will have one vote for each share, and will vote the shares based on
instructions from the purchasers.

In accordance with Statement of Financial Accounting Standards (FAS)
No. 125, "Accounting for Transfers and Servicing of Financial Assets
and Extinguishments of Liabilities," we accounted for this
transaction as a sale and recorded an after-tax gain of approximately
$1.0 billion in the second quarter of 1998.  Because the receivable
from the second installment payment does not have a stated interest
rate, we are imputing interest at 9%. We expect to receive total net
proceeds of approximately $2.1 billion from this transaction. Net
proceeds from the initial installment were approximately $1.1
billion, which we used to pay down short-term debt balances and for
general corporate purposes.  We have hedged all foreign exchange risk
associated with the final installment.

                                  
                               Page 4
                                  
<PAGE>

               AMERITECH CORPORATION AND SUBSIDIARIES
                                  
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  
                         SEPTEMBER 30, 1998
                                  

Note 3:  Comprehensive Income

On January 1, 1998, we adopted (FAS) 130, "Reporting Comprehensive
Income."  This statement established standards for reporting and
display of comprehensive income and requires that all components of
comprehensive income be reported in annual financial statements
having the same prominence as other financial statements.

Comprehensive income for the three and nine months ended September
30, 1998 and 1997 is as follows:

                                Three Months Ended   Nine Months Ended
                                  September 30          September 30
                                 ---------------       ---------------
                                1998        1997       1998       1997
                                ----        ----       ----       ----

Net income................... $  645     $   613    $ 2,845    $ 1,686
Foreign currency translation
   adjustment.................   330        (65)        287      (290)
Unrealized gain (loss) on
   available-for-sale
   securities.................  (17)           1          7          1
Reclassification adjustment to
   net income for cumulative
   translation adjustment on
   TCNZ shares sold...........    --          --         56         --
Reclassification adjustment to
   net income for realized gain
   on sale of securities.....    (1)          --        (1)         --
                              -------    -------    -------    -------
Comprehensive income......... $  957     $   549    $ 3,194    $ 1,397
                              =======    =======    =======    =======

Our foreign operations and investments in international ventures are
subject to certain risks related to fluctuation in foreign currency
exchange rates.  Foreign exchange transaction gains and losses
incurred by wholly owned subsidiaries impact operating income, while
transaction gains and losses incurred by other international ventures
(primarily equity method investments) impact other income, net.
Translation adjustments result in a change in the investment balance
and a corresponding change in accumulated comprehensive income in the
consolidated balance sheet.  The change is negative when the U.S.
dollar strengthens against the local currency.

FAS 130 requires disclosure of the tax effects related to the
components of comprehensive income.  The deferred tax effects of the
unrealized gain (loss) on available-for-sale securities were a $10
million benefit and a $4 million expense, respectively, for the three
and nine months ended September 30, 1998.  The deferred tax effect of
the realized gain in the third quarter of 1998 was not significant.
We do not recognize deferred income taxes on foreign currency
translation adjustments.



                               Page 5
                                  
<PAGE>

               AMERITECH CORPORATION AND SUBSIDIARIES
                                  
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  
                         SEPTEMBER 30, 1998
                                  

Note 4:  Restructuring Charge

In March 1998, we announced plans to significantly reduce future
operating expenses by the end of 2002.  As part of this cost
containment program, we recorded a pretax restructuring charge of
$104 million ($64 million after-tax or $0.06 per share) in March 1998
principally to cover the costs of consolidating security monitoring
centers and closing 53 company-owned cellular retail stores.  The
charge includes employee-related costs (principally severance) of
approximately $54 million for the termination of the employment of
approximately 5,000 employees, as well as other costs of
approximately $50 million related to lease terminations and asset
write-downs.  We have accounted for the employee costs of the
restructuring charge in accordance with our existing severance plans
and following FAS 112, "Employers' Accounting for Postemployment
Benefits."  We have accounted for the other restructuring costs in
accordance with existing accounting literature for restructurings.
The charge does not include approximately 550 employees identified
for termination when we acquired certain security services assets in
1997.  We included the cost of terminating the employment of these
employees in our purchase price.

Employee reductions under the March 1998 restructuring program were
616 in the third quarter of 1998 and 1,096 for the first nine months
of 1998.  Termination costs related to these employees were
approximately $11 million. We also incurred nonemployee costs of
approximately $10 million in the third quarter of 1998 related to
this restructuring, resulting in an accrual balance of approximately
$83 million as of September 30, 1998.


Note 5:  Strategic Partnership with Tele Danmark A/S

In January 1998, we purchased a 34% interest in Tele Danmark A/S,
the national communications provider in Denmark, from the Kingdom of
Denmark for approximately $3.1 billion. As part of our investment
agreement, Tele Danmark repurchased and retired all remaining shares
owned by the Danish government, effectively increasing our equity
ownership to approximately 42% of Tele Danmark. We funded this
investment in part by issuing $1.75 billion of long-term debt in the
United States and $750 million of additional, unsecured Eurodollar
notes.

The audited 1997 financial statements of Tele Danmark reflect, on a
U.S. GAAP basis, total assets of $7.4 billion and revenues of $3.6
billion. We account for this investment using the equity method of
accounting.


Note 6:  Earnings Per Share

We compute basic earnings per common share by dividing net income by
the weighted average number of common shares outstanding during the
periods.  We calculate diluted earnings per share by including all
dilutive potential common shares such as stock options.  No
adjustment to reported net income is required when computing diluted
earnings per share.

                                  
                               Page 6
                                  
<PAGE>

               AMERITECH CORPORATION AND SUBSIDIARIES
                                  
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  
                         SEPTEMBER 30, 1998
                                  

Note 6:  Earnings Per Share (cont'd.)

The following represents the average common shares outstanding and
dilutive potential common shares for the periods indicated:

                                Three Months Ended    Nine Months Ended
                                   September 30          September 30
                                 ---------------       ---------------
                                 1998       1997       1998       1997
                                 ----       ----       ----       ----
Average common shares
  outstanding (000s)....... 1,102,842  1,098,070  1,101,226  1,099,680
Dilutive potential common
  shares (000s)............     9,920      6,023      8,959      5,975
                            ---------  ---------  ---------  ---------
Average shares with
  dilution (000s).......... 1,112,762  1,104,093  1,110,185  1,105,655
                            =========  =========  =========  =========

Note 7:  Merger Agreement

On May 11, 1998, we jointly announced with SBC Communications Inc.
(SBC) a definitive agreement to merge an SBC subsidiary with
Ameritech in a transaction in which each share of Ameritech common
stock will be converted into and exchanged for 1.316 shares of SBC
common stock.  After the merger, Ameritech will be a wholly owned
subsidiary of SBC.  The transaction was approved by the Board of
Directors of each company and is intended to be accounted for as a
pooling of interests and to be a tax-free reorganization.  The merger
is subject to the satisfaction of certain conditions and regulatory
approvals, as well as approval by the shareowners of each company.
Ameritech shareowners will vote on the merger proposal at a special
meeting of shareowners to be held on December 11, 1998.  SBC has
called a special meeting of its shareowners to consider various
matters relating to this transaction on December 10, 1998.


Note 8:  Recent Development

On October 20, 1998, the Austrian government announced that Ameritech
was not selected as the strategic partner in the partial
privatization of Telekom Austria Aktiengesellschaft (Telekom
Austria).  We had bid for a 25% stake in Telekom Austria, the primary
fixed line and wireless provider in Austria.


Note 9:  Reclassifications

We have made reclassifications to certain 1997 balances to correspond
to the presentation as of September 30, 1998.

                                  
                               Page 7
                                  

<PAGE>

          Item 2 - Management's Discussion and Analysis of
            Financial Condition and Results of Operations
                    -----------------------------
               AMERITECH CORPORATION AND SUBSIDIARIES
                                  
      THREE AND NINE MONTH PERIODS ENDED SEPTEMBER 30, 1998 vs.
        THREE AND NINE MONTH PERIODS ENDED SEPTEMBER 30, 1997
                                  
RESULTS OF OPERATIONS
---------------------
Results of operations for the nine months ended September 30, 1998
include a one-time pretax gain of $1.5 billion ($1.0 billion after-
tax, or $0.91 per diluted share) related to the sale of substantially
all of our shares in Telecom Corporation of New Zealand Limited
(TCNZ).  Results for the nine months also include a one-time, pretax
charge of $104 million ($64 million after-tax or $0.06 per share) for
restructuring related to a cost containment program, as well as a one-
time pretax charge of $54 million ($34 million after-tax, or $0.03
per share) for a currency-related fair-value adjustment in
conjunction with our January 1998 investment in Tele Danmark.

Results for the three and nine months ended September 30, 1997
include an $87 million after-tax charge ($0.08 per share) related to
our share of the costs of a work force restructuring at Belgacom, the
national communications company of Belgium, as well as a pretax gain
of $52 million ($37 million after-tax, or $0.04 per share) related to
the sale of our New Zealand investment in Sky Network Television
Limited.

Results for the three and nine months ended September 30, 1998,
compared with the prior year period, were as follows (dollars in
millions, except per share amounts):

Three Months Ended September 30                     Increase  Percent
-------------------------------
                                 1998      1997    (Decrease)  Change
                                 ----      ----     --------   ------
Income before one-time items  $  645     $  576     $   69     12.0
EPS before one-time items
  Basic                         0.58       0.52       0.06     11.5
  Diluted                       0.58       0.52       0.06     11.5
Net income                       645        613         32      5.2
Earnings per share
  Basic                         0.58       0.56       0.02      3.6
  Diluted                       0.58       0.56       0.02      3.6

Nine Months Ended September 30                      Increase  Percent
------------------------------
                                 1998      1997    (Decrease)  Change
                                 ----      ----     --------   ------
Income before one-time items  $1,931     $1,736     $  195     11.2
EPS before one-time items
  Basic                         1.75       1.58       0.17     10.8
  Diluted                       1.74       1.57       0.17     10.8
Net income                     2,845      1,686      1,159     68.7
Earnings per share
  Basic                         2.58       1.53       1.05     68.6
  Diluted                       2.56       1.53       1.03     67.3
                                  
                               Page 8
                                  

<PAGE>

               AMERITECH CORPORATION AND SUBSIDIARIES
          MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
            CONDITION AND RESULTS OF OPERATIONS (cont'd.)
                                  
Revenues
--------
                                  September 30      Increase  Percent
                                  ------------
(dollars in millions)            1998      1997    (Decrease)  Change
 -------------------             ----      ----     --------   ------

Three Months Ended            $4,290     $4,006     $  284      7.1
Nine Months Ended             12,712      11,851       861      7.3

Revenues increased for the three and nine months ended September 30,
1998 primarily due to increased revenues from call management
services as well as continued growth in the demand for data-related
services.  Access line growth, combined with increases in the number
of cellular, paging and security services customers, also contributed
to the revenue increases.  Decreased revenues from network access
services partially offset these increases, as discussed below.

---------------------------------------------------------------------
Local service
-------------
                                  September 30      Increase  Percent
                                  ------------
(dollars in millions)            1998      1997    (Decrease)  Change
 -------------------             ----      ----     --------   ------

Three Months Ended            $1,768     $1,661     $  107      6.4
Nine Months Ended              5,189      4,898        291      5.9

Local service revenues include basic monthly service fees and usage
charges, fees for call management services, installation and
connection charges, certain data services and most public phone
revenues.  Local service revenues increased for the three and nine
months ended September 30, 1998 due largely to a 21% increase in
revenues from call management services, resulting from strong growth
in both the number of activated features subscribed to on a monthly
basis and services provided on a pay-per-use basis.  Demand for data
transport and Internet access services also increased, and total
access lines in service grew by 3.7% over the comparable prior year
period.

There were 20,925,000 access lines in service as of September 30,
1998 compared with 20,173,000 as of September 30, 1997 (restated to
standardize counting of voice-grade equivalent lines).

---------------------------------------------------------------------
Network access
--------------
                                  September 30      Increase  Percent
                                  ------------
(dollars in millions)            1998      1997    (Decrease)  Change
 -------------------             ----      ----     --------   ------

Interstate
----------

Three Months Ended            $  607     $  606     $    1      0.2
Nine Months Ended              1,851      1,875       (24)     (1.3)

Intrastate
----------

Three Months Ended            $  126     $  153     $ (27)    (17.6)
Nine Months Ended                435        457       (22)     (4.8)

Network access revenues include fees charged to interexchange
carriers that use our local landline communications network to
connect customers to their long distance networks.  In addition, end
users pay flat rate access fees to connect to the long distance
networks.  These revenues result from both interstate and intrastate
services.

                                  
                               Page 9
                                  

<PAGE>

               AMERITECH CORPORATION AND SUBSIDIARIES
          MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
            CONDITION AND RESULTS OF OPERATIONS (cont'd.)
                                  
Network access (cont'd.)
------------------------

Interstate network access revenues increased for the three months
ended September 30, 1998 due primarily to strong growth in demand for
high capacity channels, partially offset by a decrease in rates
resulting from an FCC rate filing effective July 1, 1998 and a change
in reporting classification of certain pay phone revenues.
Interstate network access revenues decreased for the nine months
ended September 30, 1998, due primarily to rate reductions resulting
from access charge reform, as well as the change in reporting
classification of certain pay phone revenues.  Because of this change
in classification, interstate network access revenues decreased and
other miscellaneous revenues increased by approximately $22 million
and $75 million in the three and nine month periods, respectively,
compared with the same periods in 1997.  Interstate minutes of use
increased by 5.3% for the three months and 6.1% for the nine months
ended September 30, 1998 compared with the same periods last year.

Intrastate network access revenues decreased for the three and nine
months ended September 30, 1998 due primarily to rate reductions that
became effective in July 1998 related to access charge reform, as
well as a change in reporting classification of certain pay phone
revenues from network access to other revenues.  The change in
classification of pay phone revenues decreased intrastate network
access revenues by approximately $6 million in the third quarter of
1998 compared with the prior year, and by approximately $15 million
for the nine months ended September 30, 1998 compared with 1997.
Volume increases, largely resulting from growth in network usage by
alternative providers of intraLATA toll service in Illinois, Michigan
and Wisconsin, combined with an increase in revenues from special
access services, partially offset the decreases. Intrastate minutes
of use increased by 7.8% for the three months and 10.9% for the nine
months ended September 30, 1998 compared with the same periods last
year.

---------------------------------------------------------------------
Long distance service
---------------------
                                  September 30      Increase  Percent
                                  ------------
(dollars in millions)            1998      1997    (Decrease)  Change
 -------------------             ----      ----     --------   ------

Three Months Ended            $  368     $  335     $   33      9.9
Nine Months Ended              1,050      1,038         12      1.2

Long distance service revenues result from customer calls to
locations outside of their local calling areas but within the same
local access and transport area (LATA).

Long distance service revenues increased for the three and nine
months ended September 30, 1998, due primarily to price increases,
partially offset by volume decreases.  The volume decreases resulted
largely from implementation of Dial 1 + capability in Illinois,
Michigan and Wisconsin, which increased competition in these
intraLATA toll markets.  In addition, other carriers are moving to
retain revenue from their customers' use of intraLATA toll calling
services, where previously they had allowed us to provide these
services in exchange for access charge payments to them.  Although we
no longer earn these revenues, we also no longer incur the related
access charge expenses.

                               Page 10
                                  

<PAGE>

               AMERITECH CORPORATION AND SUBSIDIARIES
          MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
            CONDITION AND RESULTS OF OPERATIONS (cont'd.)
                                  
Cellular, directory and other
-----------------------------
                                  September 30      Increase  Percent
                                  ------------
(dollars in millions)            1998      1997    (Decrease)  Change
 -------------------             ----      ----     --------   ------

Three Months Ended            $1,421     $1,251     $  170     13.6
Nine Months Ended              4,187      3,583        604     16.9

Cellular, directory and other revenues include revenues from cellular
communications services, paging services, telephone directory
publishing, lease financing and billing and collection services,
telephone equipment sales and installation, security services and
cable TV programming.

Cellular, directory and other revenues increased for the three and
nine months ended September 30, 1998, due to the following factors:

- Increased revenues from security services, resulting primarily from
  strong customer growth.  Total customers increased to 1,148,000 as
  of September 30, 1998, reflecting internal growth of 10% in the
  third quarter on an annualized basis and the inclusion of our
  acquisitions in October 1997 of the security assets of Rollins
  Protective Services and Republic Security Company Holdings;
- Increased directory revenues, resulting primarily from a revised
  directory agreement for Illinois and parts of Indiana, as well as
  price increases and higher revenues from our Internet yellow pages
  service;
- Higher wireless revenues resulting from strong growth in the number
  of cellular and paging subscribers compared with the same period
  last year.  We had 3.5 million total cellular subscribers, compared
  with 3.0 million in the comparable prior year period, and 1.5
  million paging customers, compared with 1.4 million last year; and,
- Other miscellaneous revenue increases resulting primarily from
  increased revenues from capital services, cable TV and voice
  messaging.  A change in reporting classification of certain pay
  phone revenues from network access to other revenues also
  contributed to the increase, as previously discussed.

---------------------------------------------------------------------
Operating expenses
------------------
                                  September 30      Increase  Percent
                                  ------------
(dollars in millions)            1998      1997    (Decrease)  Change
 -------------------             ----      ----     --------   ------

Three Months Ended            $3,227     $3,044     $  183      6.0
Nine Months Ended              9,580      8,936        644      7.2

Operating expenses increased for the three and nine months ended
September 30, 1998 due primarily to continued growth in the cellular,
cable TV and security services businesses, as well as increased
employee-related costs and depreciation expense resulting from
overall business growth.
                                  
                               Page 11
                                  

<PAGE>

               AMERITECH CORPORATION AND SUBSIDIARIES
          MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
            CONDITION AND RESULTS OF OPERATIONS (cont'd.)
                                  
Employee-related expenses
-------------------------

                                  September 30      Increase  Percent
                                  ------------
(dollars in millions)            1998      1997    (Decrease)  Change
 -------------------             ----      ----     --------   ------

Three Months Ended            $1,054     $1,004     $   50      5.0
Nine Months Ended              3,108      2,956        152      5.1

Employee-related expenses increased for the three and nine months
ended September 30, 1998, due primarily to higher employee levels at
emerging and growth businesses, combined with higher wage and bonus
rates and overtime expenses at the landline communications
subsidiaries.  Higher benefit expenses and payroll taxes also
contributed to the increases.

During June 1998, the International Brotherhood of Electrical Workers
(IBEW) ratified a new five-year contract effective June 28, 1998.
The contract provides basic wage increases of 11.2% (compounded) over
three years and a one-time $500 signing bonus per employee.  In
addition, the contract addresses benefits, pensions, work rules and
other wage-related items.  The contract will be re-opened in 2001 to
address certain economic wage issues for the final two years of the
contract.

The Communications Workers of America (CWA) have reached similar
terms under an agreement ratified by union membership on July 17,
1998.  The CWA contract is effective August 9, 1998 and expires on
March 31, 2001.  The contract provides basic wage increases of 11.2%
(compounded) over the contract period and a one-time $500 signing
bonus per employee, and also addresses benefits, pensions, work-rules
and other wage-related items.

The IBEW represents approximately 12,000 employees in Illinois and
northwest Indiana, while the CWA represents approximately 28,000
employees in all five states of our region.

We employed 70,728 people as of September 30, 1998, compared with
69,056 as of September 30, 1997.  More than 70% of the increase is
attributable to expansion of our security services business.

---------------------------------------------------------------------
Depreciation and
  amortization
------------------
                                  September 30      Increase  Percent
                                  ------------
(dollars in millions)            1998      1997    (Decrease)  Change
 -------------------             ----      ----     --------   ------

Three Months Ended            $  687     $  621     $   66     10.6
Nine Months Ended              2,022      1,850        172      9.3

Depreciation and amortization expense increased for the three and
nine months ended September 30, 1998 due primarily to higher
property, plant and equipment balances.  Higher depreciation rates on
certain asset categories contributed to the increases, as we used
shorter depreciable lives for newer technologies.  Amortization of
goodwill and other intangibles resulting from our asset acquisitions
in security services also contributed to the increase.

                                  
                               Page 12
                                  

<PAGE>

               AMERITECH CORPORATION AND SUBSIDIARIES
          MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
            CONDITION AND RESULTS OF OPERATIONS (cont'd.)
                                  
Other operating expenses
------------------------
                                  September 30      Increase  Percent
                                  ------------
(dollars in millions)            1998      1997    (Decrease)  Change
 -------------------             ----      ----     --------   ------

Three Months Ended            $1,342     $1,271     $   71      5.6
Nine Months Ended              3,893      3,677        216      5.9

Other operating expenses increased for the three and nine months
ended September 30, 1998 due primarily to higher access charge
expenses resulting from state commission rulings (which we are
contesting) requiring local exchange carriers to pay reciprocal
compensation for calls by their customers to the Internet via
Internet service providers (ISPs) who, in turn, are customers of
competing local exchange carriers.  As of September 30, 1998, we had
set aside approximately $107 million in segregated funds pending
final resolution of these disputes.  In October 1998, we made
reciprocal compensation payments, under protest, of approximately $75
million to competing carriers from these segregated funds.

Higher cost of sales due to growth-related customer increases at the
cellular and security services operations and increased sales of
customer premises equipment also contributed to the increases.  A
decrease in right-to-use fees for switching system software, combined
with decreases in other contract services expenses and material
costs, partially offset these increases.

---------------------------------------------------------------------
Restructuring charge
--------------------
                                  September 30      Increase  Percent
                                  ------------
(dollars in millions)            1998      1997    (Decrease)  Change
 -------------------             ----      ----     --------   ------

Three Months Ended            $   --     $   --     $   --    n/a
Nine Months Ended                104         --        104    n/a

In March 1998, we announced plans to significantly reduce future
operating expenses by the end of 2002.  As part of this cost
containment program, we recorded a pretax restructuring charge of
$104 million ($64 million after-tax or $0.06 per share) in March 1998
to cover the costs of consolidating security monitoring centers and
closing 53 company-owned cellular retail stores.  The charge covers
employee-related costs of approximately $54 million for the
termination of the employment of approximately 5,000 employees, as
well as other costs of approximately $50 million related to lease
terminations and asset write-downs.

A significant number of employees whose employment relationship is to
be severed (approximately 3,200) are employed by our security
services subsidiary.  These employees are being displaced due
principally to the consolidation of 24 monitoring centers.  Staffing
requirements at these new locations will require the hiring of a
significant number of new employees.

Employee reductions as part of this restructuring program were 616 in
the third quarter of 1998 and 1,096 for the first nine months of
1998.

                                  
                               Page 13
                                  
<PAGE>

               AMERITECH CORPORATION AND SUBSIDIARIES
          MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
            CONDITION AND RESULTS OF OPERATIONS (cont'd.)
                                  
Taxes other than income taxes
-----------------------------
                                  September 30      Increase  Percent
                                  ------------
(dollars in millions)            1998      1997    (Decrease)  Change
 -------------------             ----      ----     --------   ------

Three Months Ended            $  144     $  148     $  (4)     (2.7)
Nine Months Ended                453        453         --     --

Taxes other than income taxes consist of property taxes, gross
receipts taxes and other taxes not directly related to earnings.
Taxes other than income taxes decreased for the three months ended
September 30, 1998 primarily as a result of property tax decreases in
Ohio, resulting from tax reform and lower tax assessments. An
increase in property taxes in Michigan, combined with higher
transaction taxes in Illinois, partially offset the decrease.  Taxes
other than income taxes were unchanged for the nine months ended
September 30, 1998 compared with the prior year.

---------------------------------------------------------------------
Other income and expenses
-------------------------
Interest expense
-----------------
                                  September 30      Increase  Percent
                                  ------------
(dollars in millions)            1998      1997    (Decrease)  Change
 -------------------             ----      ----     --------   ------

Three Months Ended            $  140     $  123     $   17     13.8
Nine Months Ended                462        371         91     24.5

Interest expense increased for the three and nine months ended
September 30, 1998, due primarily to higher overall debt balances
resulting from our $3.1 billion investment in Tele Danmark in January
1998.  We funded this investment in part by issuing $2.5 billion in
long-term debt.  Lower interest on short-term debt, resulting
primarily from a reduction in short-term debt balances following the
sale of substantially all of our TCNZ shares, partially offset these
increases.

---------------------------------------------------------------------
Other (income) expense, net
---------------------------
                                                      Change
                                  September 30       (Income) Percent
                                  ------------
(dollars in millions)            1998      1997      Expense   Change
 -------------------             ----      ----      -------   ------

Three Months Ended            $ (83)     $(127)     $   44    n/m
Nine Months Ended              (1,761)    (178)      (1,583)  n/m

Other income includes earnings related to Ameritech's investments
accounted for using the equity method, interest income and other
nonoperating items.

Other income decreased for the three months ended September 30, 1998
due primarily to the effects of a one-time pretax gain of $52 million
($37 million after-tax or $0.04 per share) related to the sale in the
third quarter of 1997 of our stake in Sky Network Television Limited.
Other income increased for the nine months ended

                                  
                               Page 14
                                  
<PAGE>

               AMERITECH CORPORATION AND SUBSIDIARIES
          MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
            CONDITION AND RESULTS OF OPERATIONS (cont'd.)
                                  
Other (income) expense, net (cont'd.)
-------------------------------------

September 30, 1998 due primarily to the effects of a one-time pretax
gain of $1,543 million ($1,012 million after-tax) resulting from the
public sale of substantially all of our stake in TCNZ, partially
offset by a one-time pretax charge of $54 million ($34 million after-
tax), recorded in the first quarter of 1998 for a currency-related
fair value adjustment related to our Tele Danmark investment.

Other income for the nine months ended September 30, 1997 includes an
$87 million after-tax charge related to our share of the costs of a
work force restructuring at Belgacom, the national communications
company of Belgium.

After eliminating the effects of the one-time items described above,
other income was $83 million for the three months and $272 million
for the nine months ended September 30, 1998.  Similarly, other
income was $75 million for the three months and $213 for the nine
months ended September 30, 1997.  The increases in 1998 resulted
primarily from our investment in Tele Danmark in the first quarter
and higher interest income throughout 1998.

---------------------------------------------------------------------
Income taxes
------------
                                  September 30      Increase  Percent
                                  ------------
(dollars in millions)            1998      1997    (Decrease)  Change
 -------------------             ----      ----     --------   ------

Three Months Ended            $  361     $  353     $    8      2.3
Nine Months Ended              1,586      1,036        550     53.1

Income tax expense increased for the three months ended September 30,
1998 due primarily to the increase in pretax earnings discussed
above.  Income tax expense increased for the nine months ended
September 30, 1998 due primarily to the tax impact of the gain
resulting from the sale of our TCNZ shares, discussed above.  The
effective tax rate was 35.9% for the three months and 35.8% for the
nine months ended September 30, 1998.  The effective rates in the
prior year periods were 37.0% and 38.0%, respectively.  The higher
rates in 1997 resulted primarily from the $87 million restructuring
charge at Belgacom in the second quarter, which received no
additional tax benefit in the United States.

---------------------------------------------------------------------
FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES
----------------------------------------------------
Cash flows from operating activities
------------------------------------
Cash flows from operations were $3,659 million for the nine months
ended September 30, 1998 compared with $3,360 million for the prior
year period, an increase of $299 million.  The increase was due
primarily to solid growth in our business, combined with improved
levels of working capital.

---------------------------------------------------------------------
Cash flows from investing activities
------------------------------------
Cash used in investing activities increased by $1,953 million to
$3,737 million for the nine months ended September 30, 1998,
primarily due to our $3.1 billion investment in Tele Danmark in
January 1998.  Capital expenditures also increased, due primarily to
increased spending at the landline communications subsidiaries to
                                  
                               Page 15
                                  
<PAGE>

               AMERITECH CORPORATION AND SUBSIDIARIES
          MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
            CONDITION AND RESULTS OF OPERATIONS (cont'd.)
                                  
Cash flows from investing activities (cont'd.)
----------------------------------------------
meet growing demand for data transport, custom calling, and private
line services and to comply with regulatory requirements.  Capital
spending also increased due to continued enhancement and expansion of
the cellular network.  The increases in cash used were partially
offset by the proceeds from our sale of substantially all of our TCNZ
shares in April 1998.  This transaction was structured as an
installment sale, with approximately half of the proceeds due at the
time of sale, and the other half due by March 31, 1999.  The initial
installment resulted in proceeds of approximately $1.1 billion.  Also
in 1998, we received proceeds of approximately $473 million from
repayment by General Electric Company of the note related to our GEIS
investment.

Investing activity for the nine months ended September 30, 1997
consisted primarily of capital expenditures, as well as investments
of approximately $100 million in the assets of several security
monitoring companies.  Other investing activities in 1997 included
proceeds from the sale of our New Zealand investment in Sky Network
Television Limited and proceeds of approximately $118 million from a
share repurchase program at TCNZ.

---------------------------------------------------------------------
Cash flows from financing and other activities
----------------------------------------------
Cash flows received from financing activities were $220 million for
the nine months ended September 30, 1998, compared with cash used of
$873 million for the same period in 1997.  Financing activities in
the first nine months of 1998 included issuance of $2.5 billion of
long-term debt and $322 million of preferred stock, primarily to
finance our acquisition of Tele Danmark.  Short-term debt decreased
by $1.6 billion, due primarily to the application of proceeds from
our sale of TCNZ shares.  During the nine months ended September 30,
1998, we also repurchased 2.9 million shares of our stock aggregating
$133 million.

On September 16, 1998, our Board of Directors declared a quarterly
dividend of $0.30 per common share, a 6.2% increase over the $0.2825
per common share declared in the third quarter of 1997 (as adjusted
for the two-for-one stock split effective December 31, 1997), and at
the same rate as the dividend declared for the first and second
quarters of 1998.

Financing activities for the nine months ended September 30, 1997
included additional short-term borrowings of $440 million, as well as
an issuance of $250 million in preferred stock by a subsidiary.
These cash inflows were more than offset by dividend payments and
repurchases of our own common stock.

---------------------------------------------------------------------
Company stock repurchase program
--------------------------------
Our Board of Directors has periodically authorized management to
repurchase shares of Ameritech stock in the open market.  Management
has the authority to repurchase approximately $1.9 billion of
additional Ameritech stock as of September 30, 1998; however, we have
agreed with SBC as part of the Merger Agreement to repurchase shares
only in connection with share issuance requirements under certain
employee benefit plans.
                                  
                               Page 16
                                  
<PAGE>

               AMERITECH CORPORATION AND SUBSIDIARIES
          MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
            CONDITION AND RESULTS OF OPERATIONS (cont'd.)
                                  
Debt ratio
----------
Our debt ratio was 43.3% as of September 30, 1998, compared with
47.9% as of December 31, 1997.  The decrease resulted primarily from
higher overall equity levels due to additional earnings accumulation,
partially offset by higher debt levels attributable to our investment
in Tele Danmark.
                                      
---------------------------------------------------------------------
Ratio of earnings to fixed charges
----------------------------------
The ratio of earnings to fixed charges for the nine months ended
September 30 was 8.55 in 1998 and 6.93 in 1997.

                                  
                               Page 17
                                  

<PAGE>

               AMERITECH CORPORATION AND SUBSIDIARIES
                                  
          MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
            CONDITION AND RESULTS OF OPERATIONS (cont'd.)
                                  
OTHER MATTERS
-------------
Regulatory considerations
-------------------------
The Telecommunications Act of 1996

In general, the Telecommunications Act of 1996 (the "1996 Act")
includes provisions designed to open local exchange markets to
competition and afford the Bell operating companies ("BOCs") or their
affiliates, the competitive opportunity to provide interLATA (long
distance) services.  Under the 1996 Act, the BOCs' ability to provide
in-region long distance services is dependent upon their satisfaction
of, among other conditions, a 14 point "competitive checklist" of
specific requirements for opening the local market to competition.

In late 1997, a U.S. District Court in Texas ruled that certain line-
of-business restrictions in the 1996 Act, including the requirement
in Section 271 that the BOCs must comply with the competitive
checklist before being permitted to provide long distance services,
constituted an unconstitutional bill of attainder by virtue of their
exclusive applicability to the BOCs.  On September 4, 1998, the U.S.
Court of Appeals for the Fifth Circuit reversed that decision, and
petitions for certiorari are pending before the U.S. Supreme Court.

In two other cases, similar constitutional challenges have been
presented to the U.S. Court of Appeals for the District of Columbia
Circuit (the "D.C. Circuit Court").  In May 1998, the D.C. Circuit
Court found that Section 274 of the 1996 Act, covering electronic
publishing activities, did not constitute an unconstitutional bill of
attainder.  The second action pending before the D.C. Circuit Court,
in which we have intervened, challenges the constitutionality of the
long distance provisions of Section 271 of the 1996 Act.  The D.C.
Circuit heard oral arguments on this case in September 1998.

Local interconnection and unbundled access

In July 1997, and in an October 1997 rehearing, the U.S. Circuit
Court of Appeals for the Eighth Circuit (the "Eighth Circuit Court")
vacated several provisions of an August 1996 FCC order regarding the
interconnection provisions of the 1996 Act (the "1996 FCC Order"),
ruling that such provisions represented improper preemptions of state
authority or were inconsistent with statutory requirements of the
1996 Act.  The Eighth Circuit Court ruled, among other things, that:
the states have exclusive jurisdiction over the pricing for local
interconnection, unbundled network elements and local service resale
involving incumbent local exchange carriers ("ILECs") and competitive
local exchange carriers ("CLECs"); the FCC cannot lawfully allow
CLECs to "pick and choose" among isolated, individual provisions from
other interconnection agreements; and the FCC cannot require ILECs
either to recombine or "rebundle" unbundled network elements for
CLECs or to provide them with a preassembled network platform (or
existing combinations of two or more network elements) at network
element prices.  These rulings of the Eighth Circuit Court were
appealed by various parties, including the FCC.

The Eighth Circuit Court upheld certain aspects of the 1996 FCC
Order.  These included, among other things:  the classification of
operational support services, operator services, directory assistance
and vertical services as unbundled network elements; the definition
of "technically feasible" interconnection to exclude economic
considerations; and the ability of CLECs to provide complete
telecommunications services by recombining network elements without
providing any of their own facilities.  We have appealed these
matters, among others.


                               Page 18
                                  

<PAGE>

               AMERITECH CORPORATION AND SUBSIDIARIES
                                  
          MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
            CONDITION AND RESULTS OF OPERATIONS (cont'd.)
                                  
Regulatory considerations (cont'd.)
-----------------------------------
Local interconnection and unbundled access (cont'd.)

The U.S. Supreme Court agreed to review the Eighth Circuit Court
decision and heard oral arguments on the case in October 1998.

In August 1997, the FCC revised its local competition rules and
required ILECs to make available a new purported network element
known as "shared transport," which would include access to all of an
ILEC's transmission facilities.  We and other ILECs appealed this
matter to the Eighth Circuit Court.  On August 10, 1998, the Eighth
Circuit Court upheld the FCC's determination that shared transport is
a network element and that it should be made available by ILECs to
entrants on an unbundled basis.  In September 1998, we filed a
petition for reconsideration of this decision by the Eighth Circuit
Court.

At present, local interconnection matters and unbundled network
element pricing continue to be resolved through interconnection
agreement negotiations or state commission arbitration provisions.
Our landline communications subsidiaries are continuing to negotiate
and enter into interconnection agreements and pursue, through
appropriate proceedings, timely recovery of the costs of providing
interconnection services so as to promote a fair competitive
environment, especially as local and long distance markets are opened
to competition at different times.  The outcome of these activities
is subject to significant legal and regulatory uncertainties, as
outlined above.

Reciprocal compensation

A number of CLECs are engaged in regulatory and judicial proceedings
with various ILECs, including our landline communications
subsidiaries, with respect to the payment of reciprocal compensation
to the CLECs for calls originating on the ILECs' networks for dial-up
connections to access the Internet via ISPs served by the CLECs'
networks.  The CLECs have asserted that such reciprocal compensation
is provided for by interconnection agreements between the CLECs and
the ILECs.  Together with other ILECs, we have maintained that we are
not required to make such reciprocal compensation payments, because
such traffic is interstate access service, not local, and therefore
is not covered by applicable local interconnection agreements.

A U.S. District Court in Illinois has ruled that our Illinois
landline communications subsidiary is required to make reciprocal
compensation payments in these circumstances under its applicable
interconnection agreements.  This order is on appeal to the U.S.
Court of Appeals for the Seventh Circuit.  Cases involving appeals by
other subsidiaries of adverse regulatory determinations are pending
in U.S. District Courts in Michigan and Wisconsin.  Pending the
outcome of such appeals, our Illinois, Michigan and Wisconsin
landline communications subsidiaries are currently making reciprocal
compensation payments, under protest, to CLECs pursuant to existing
interconnection agreements.  The Public Utilities Commission of Ohio
recently ruled that our Ohio landline communications subsidiary is
required to make reciprocal compensation payments, but stayed its
order pending rehearing.

On October 30, 1998, the FCC issued a Memorandum Opinion and Order in
which it found that a service offering by another ILEC, permitting
ISPs to furnish their customers with high speed access to the
Internet through a dedicated connection, is an interstate service
that is properly tariffed at the federal level.  In so ruling, the
FCC considered the totality of the communication as an end-to-end
transmission between an end user and the Internet website accessed by
the end user,
                                  
                               Page 19
                                  
<PAGE>

               AMERITECH CORPORATION AND SUBSIDIARIES
                                  
          MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
            CONDITION AND RESULTS OF OPERATIONS (cont'd.)
                                  
Regulatory considerations (cont'd.)
-----------------------------------
Reciprocal compensation (cont'd.)

and rejected the argument that such a communication should be
separated into two components (consisting of an ILEC-provided
intrastate telecommunications service that terminated at the ISP's
local server, and an interstate information service provided by the
ISP).  The FCC expressly limited its decision only to the high speed,
dedicated access connection between an end user subscriber and an ISP
as described in the proposed tariff, and made no determination
whether ILECs generally should be required to pay reciprocal
compensation when they exchange Internet traffic with CLECs.  The FCC
has indicated its intention to provide separate guidance in the near
future on the jurisdictional nature of dial-up access via a LEC's
local switch.

We believe that this recent FCC Order is consistent with our view
that Internet traffic is appropriately classified as interstate and
that reciprocal compensation is not required for dial-up access in
the circumstances described above.  We also believe that our view
should ultimately be upheld in pending or future appellate judicial
proceedings or through FCC determination.  However, there can be no
assurance as to that outcome or that our landline communications
subsidiaries will not be required to begin or continue to make such
reciprocal compensation payments under existing interconnection
agreements.  In addition to reciprocal compensation now being paid by
our Illinois, Michigan and Wisconsin landline communications
subsidiaries, we are making periodic accruals of amounts which may
become payable in Ohio and Indiana in the event our view is not
ultimately upheld.

Universal service, access charge reform and price caps

In May 1997, the FCC issued three closely-related orders that
established rules to implement the universal service provisions of
the 1996 Act (the "Universal Service Order") and to revise both
interstate access charge pricing (the "Access Reform Order") and the
price cap plan for ILECs (the "Price Cap Order").

Universal service  -  The FCC's Universal Service Order provides that
all interstate telecommunications providers will be required to
contribute to universal service funding, based on retail
telecommunications revenues.  The Universal Service Order establishes
a multi-billion dollar interstate universal service fund to help link
eligible schools and libraries and low-income consumers and rural
health care providers to the global telecommunications network
(including the Internet). The FCC directed the phase-in of these
funds during 1998, with a reduced funding rate for the first nine
months of 1998.

Access charge reform  -  In its May 1997 order on interstate access
charge pricing (the "Access Reform Order"), the FCC restructured
interstate access pricing and adopted changes to its tariff structure
requiring ILECs to use rates that reflect the type of costs incurred.
The Access Reform Order also continued in place existing rules by
which ILECs may not assess interstate access charges on ISPs and
purchasers of unbundled network elements.  On August 19, 1998, the
Eighth Circuit Court affirmed the FCC's approach in the Access Reform
Order.  We are complying with the Access Reform Order and do not
intend to seek any review of the Eighth Circuit Court decision.

                                  
                               Page 20
                                  
<PAGE>

               AMERITECH CORPORATION AND SUBSIDIARIES
                                  
          MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
            CONDITION AND RESULTS OF OPERATIONS (cont'd.)
                                  
Regulatory considerations (cont'd.)
-----------------------------------
Universal service, access charge reform and price cap order (cont'd.)

Access charge reform (cont'd.)  -  We also have implemented state
changes that mirror the federal access reform structure.  Various
interexchange carriers opposing such changes have filed complaints
before the Illinois and Michigan state commissions.  On October 26,
1998, in response to such a complaint, the Michigan Public Service
Commission (the "MPSC") ordered us to split the Michigan intrastate
primary interexchange carrier charge ("PICC") into two separate per
line components, with one-half of the total charge payable by the
intraLATA toll carrier and the other half by the interLATA toll
carrier; accordingly, the revenues we receive from this charge will
decrease to the extent that we are the intraLATA toll carrier.  In
addition, the MPSC required that these changes be made retroactive to
January 1, 1998, when the initial tariffs for this charge were filed.
The MPSC did not adjust the overall amount of the PICC, but did
require the filing of additional information on that subject for
consideration in subsequent proceedings.  We intend to appeal the
MPSC's order.  The MPSC denied our request for a stay of this order.

Price caps  -  Our interstate services are subject to price cap
regulation, which limits prices rather than profits.  The Price Cap
Order effectively reduced access charges by increasing the price cap
productivity offset factor to 6.5% from the previous 5.3% and by
applying this factor uniformly to all access providers.  The order
also required ILECs subject to price cap regulation to set their 1997
price cap index assuming that the 6.5% factor had been in effect
since July 1996.  Certain parties have sought judicial review of the
Price Cap Order, and a decision by the D. C. Circuit Court with
respect to these matters is now pending.

We currently cannot predict the precise impact of these regulatory
changes on our business, especially as their nature and timing may
evolve in connection with judicial and FCC consideration of other
provisions of the 1996 Act.

Number portability

On May 5, 1998, the FCC entered an order to allow telecommunications
carriers, such as our landline communications subsidiaries, to
recover over a five-year period their carrier-specific costs of
implementing long-term number portability.  Long-term number
portability allows customers to retain their local telephone numbers
in the event they change local exchange carriers.  We are completing
implementation of long-term number portability by the end of 1998, in
compliance with an FCC-mandated schedule, and plan to file our number
portability surcharge in February 1999.

Other recent federal regulatory developments - SecurityLink
-----------------------------------------------------------
On September 25, 1998, the FCC issued a Memorandum Opinion and Order
on Remand and Order to Show Cause relating to an asset acquisition by
our security services subsidiary ("SecurityLink") in 1996.  The FCC
found that we had gained "financial control" over the entity from
which SecurityLink acquired the security services assets, in
violation of the 1996 Act, and required that, within 30 days after
issuance of the Order, we show cause why the FCC should not require
SecurityLink to divest the assets acquired in this transaction.
Previously, the FCC had ruled that the same transaction was
permissible under the 1996 Act, and the D.C. Circuit Court had
vacated and remanded such decision to the FCC.  On October 26, 1998,
we filed our response with the FCC, contending that divestiture would
not be an appropriate remedy.



                               Page 21
                                  
<PAGE>

               AMERITECH CORPORATION AND SUBSIDIARIES
                                  
          MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
            CONDITION AND RESULTS OF OPERATIONS (cont'd.)
                                  
Other recent federal regulatory developments - SecurityLink (cont'd.)
-----------------------------------------------------------
Previously, on July 8, 1998, the FCC issued both a Memorandum Opinion
and Order, finding that three separate asset acquisitions by
SecurityLink in 1997 (made after the first FCC ruling on security
services described above and before the D.C. Circuit Court decision)
violated the same provision of the 1996 Act, and a concurrent Order
to Show Cause why the FCC should not require divestiture of the
assets acquired in such transactions.  We filed our response with the
FCC on August 7, 1998, contending that divestiture would not be an
appropriate remedy.  The FCC's decision on this matter is pending.

Competitive environment
-----------------------
With the passage of the 1996 Act and other regulatory initiatives,
our local service markets have been more extensively opened to new
competitors, many of which are believed to have initially targeted
high-volume business customers in densely populated areas.
Interconnection agreements with competitive service providers require
our landline communications subsidiaries to provide interconnection
or access to unbundled network elements at cost-based rates and
telecommunications services at discounted, wholesale rates.  These
agreements and applicable tariffs may result in some downward
pressure on local service revenues, as a portion of our revenue
shifts from local service at retail prices to network access and
wholesale services at lower rates.  We cannot predict with certainty
the impact that these and other developments ultimately may have on
our future business, results of operations or financial condition.

Year 2000 readiness
-------------------
The Year 2000 issue exists because many computer systems and
applications, including those embedded in equipment and facilities,
use two digit rather than four digit date fields to designate an
applicable year.  As a result, the systems and applications may not
properly recognize the year 2000 or process data which includes it,
potentially causing data miscalculations or inaccuracies or
operational malfunctions or failures.

We have established a centrally-managed, company-wide initiative to
identify, evaluate and address Year 2000 issues.  Begun in May 1996,
our Year 2000 effort covers our network and supporting infrastructure
for our provision of local switched and data telecommunications
services, cellular and paging services, cable TV service and security
services.  Also within the scope of this initiative are our
operational and financial information technology ("IT") systems and
applications, end-user computing resources and building systems, such
as security, elevator and heating and cooling systems.  In addition,
the project includes a review of the Year 2000 compliance efforts of
our key suppliers and other principal business partners and, as
appropriate, the development of joint business support and continuity
plans for Year 2000 issues.  While this initiative is broad in scope,
it has been structured to identify and prioritize our efforts for
mission critical systems, network elements and products and key
business partners.

Work is progressing in the following phases:  inventory, assessment,
remediation, testing, deployment and monitoring.  Although the pace
of the work varies among our business units and the phases are often
conducted in parallel, as of September 30, 1998, the inventory and
assessment phases have been substantially completed and the
remediation and testing phases are in progress.

                                  
                               Page 22
                                  
<PAGE>

               AMERITECH CORPORATION AND SUBSIDIARIES
                                  
          MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
            CONDITION AND RESULTS OF OPERATIONS (cont'd.)
                                  
Year 2000 readiness (cont'd.)
-----------------------------
We expect that most of our mission critical systems, network elements
and products will be remediated and redeployed in January 1999,
subject to additional Year 2000 testing and responsive actions.  Our
ability to meet that target is dependent upon a variety of factors,
including the timely provision of necessary upgrades and
modifications by our suppliers and contractors.  In some instances,
upgrades or modifications are not expected to be available until late
1998 or early 1999; accordingly, our testing and redeployment of
affected items may be delayed until later in 1999.  In addition, we
have no method of ensuring that third parties on whom we depend for
essential services (such as electric utilities, interexchange
carriers, etc.) will convert their critical systems and processes in
a timely manner.  Failure or delay by any of these parties could
significantly disrupt our business.  However, we have established a
supplier compliance program, and we are working with our key
suppliers to minimize such risks.

We currently estimate that we will incur expenses of approximately
$195 million through 2001 in connection with our anticipated Year
2000 efforts, in addition to approximately $57 million in expenses
incurred through September 30, 1998 for matters historically
identified as Year 2000-related.  The timing of our expenses may vary
and is not necessarily indicative of readiness efforts or progress to
date.  We anticipate that a portion of our Year 2000 expenses will
not be incremental costs, but rather will represent the redeployment
of existing IT resources.  We also expect to incur certain capital
improvement costs (totaling approximately $30 million) to support
this project.  Such capital costs are being incurred sooner than
originally planned, but, for the most part, would have been required
in the normal course of business.

We have significant minority investments in large telecommunications
providers in Belgium, Denmark and Hungary, and have been advised by
management representatives of those companies that activities to
address Year 2000 issues are under way.  Based on information
reported to us, the estimated proportionate share of Year 2000 costs
that will flow through to our earnings as a result of such activities
is not expected to be material.

As part of our Year 2000 initiative, we are evaluating scenarios that
may occur as a result of the century change and are in the process of
developing contingency and business continuity plans tailored for
Year 2000-related occurrences. Contingency planning to maintain and
restore service in the event of natural disasters, power failures and
software-related problems has been part of our standard operation for
many years, and we are working to leverage this experience in the
development of plans tailored to meet Year 2000-related challenges.
This work is being performed through centrally-coordinated, company-
wide teams organized by critical business functions (including
ordering, provisioning, maintenance, billing and power).  Our
contingency and business continuity plans are expected to assess the
potential for business disruption in various scenarios, and to
provide for key operational back-up, recovery and restoration
alternatives.

The above information is based on our current best estimates, which
were derived using numerous assumptions of future events, including
the availability and future costs of certain technological and other
resources, third party modification actions and other factors.  Given
the complexity of these issues and possible

                                  
                               Page 23
                                  
<PAGE>

               AMERITECH CORPORATION AND SUBSIDIARIES
                                  
          MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
            CONDITION AND RESULTS OF OPERATIONS (cont'd.)
                                  
Year 2000 readiness (cont'd.)
-----------------------------
unidentified risks, actual results may vary materially from those
anticipated and discussed above.  Specific factors that might cause
such differences include, among others, the availability and cost of
personnel trained in this area, the ability to locate and correct all
affected computer code, the timing and success of remedial efforts of
our third party suppliers and similar uncertainties.

Euro conversion
---------------
On January 1, 1999, eleven of the fifteen member countries of the
European Union will comprise the Economic and Monetary Union (EMU)
and are scheduled to establish fixed conversion rates between their
sovereign currencies and the future European currency unit, the euro.
The participating countries have agreed to adopt the euro as their
common legal currency on that date.  The sovereign "legacy"
currencies of these countries will continue in circulation within the
respective countries until at least January 1, 2002, but not later
than July 1, 2002.  At the time of final conversion, new euro-
denominated bills and coins will be used exclusively.

Ameritech has several significant minority investments in Europe,
including Belgacom in Belgium, Tele Danmark in Denmark and Matav in
Hungary.  Of these, only Belgium is among the countries converting to
the euro; Tele Danmark, however, has operating subsidiaries in
several participating countries.  Management at these companies must
address several issues related to the conversion, including increased
price transparency, the tax treatment of conversion gain or loss,
changes to business processes and modification of information systems
to process euro-denominated transactions during the transition
period.

Management at our European affiliates have informed us that efforts
to convert computer systems and business processes are well under way
and are scheduled to be complete by the time the conversion takes
place.  Based on information reported to us, the estimated
proportionate share of euro-related costs that will flow through to
our earnings is not expected to be material.

Effects of foreign currency fluctuations
----------------------------------------
Our foreign operations and investments in international ventures are
subject to certain risks related to fluctuation in foreign currency
exchange rates.  In the three and nine months ended September 30,
1998, due to fluctuations in the U.S. dollar, we recognized some
foreign exchange transaction gains and losses and currency
translation adjustments related to these investments.  Foreign
exchange transaction gains and losses incurred by wholly owned
subsidiaries impacted operating income.  Transaction gains and losses
incurred by other international ventures (primarily equity method
investments) impacted other income, net.  Translation adjustments
resulted in a change in the investment balance and a corresponding
change in accumulated comprehensive income on the consolidated
balance sheet.  While future fluctuations in currency exchange rates
could impact results of operations or financial position, foreign
operations continue to provide strong financial results and earnings
growth.

                                  
                               Page 24
                                  
<PAGE>

               AMERITECH CORPORATION AND SUBSIDIARIES
                                  
          MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
            CONDITION AND RESULTS OF OPERATIONS (cont'd.)
                                  
Disclosures about market risk
-----------------------------
We are exposed to market risks primarily from changes in interest
rates and foreign currency exchange rates.  To manage our exposure to
these fluctuations, we occasionally enter into various hedging
transactions that have been authorized according to documented
policies and procedures.  We do not use derivatives for trading
purposes, to generate income or to engage in speculative activity,
and we never use leveraged derivatives.

The amounts shown below represent the estimated potential loss that
we could incur from adverse changes in either interest rates or
foreign exchange rates using the value-at-risk estimation model.  The
value-at-risk model uses historical foreign exchange rates and
interest rates to estimate the volatility and correlation of these
rates in future periods.  It estimates a loss in fair market value
using the variance/co-variance statistical modeling technique and
includes substantially all market risk exposures, specifically
excluding equity-method investments.  The fair value losses shown in
the table below are for a one-day time period with a confidence level
of 95% (amounts in millions of dollars).  They have no impact on our
results of operations or financial condition.

                         Sept. 30, 1998     Dec. 31, 1997
                         --------------     -------------
Risk Category
  Interest rates                  $56               $ 25
  Foreign exchange                 --                 --

The 95% confidence interval signifies our degree of confidence that
actual one-day losses would not exceed the estimated losses shown
above.  The amounts shown here disregard the possibility that
interest rates and foreign currency exchange rates could move in our
favor.  The value-at-risk model assumes that all movements in these
rates will be adverse.  Actual experience has shown that gains and
losses tend to offset each other over time, and it is highly unlikely
that we could experience losses such as these over an extended period
of time.  These amounts should not be considered projections of
future losses, since actual results may differ significantly
depending upon activity in the global financial markets.

The fair market value at risk increased as of September 30, 1998 due
primarily to an increase in fixed-rate debt, and to an increase in
the volatility of interest rates, mostly resulting from market
activity in the third quarter of 1998.  We issued $2.5 billion of
fixed-rate debt in the first quarter of 1998, principally to fund our
investment in Tele Danmark.  Value at risk related to foreign
exchange has not changed significantly since December 31, 1997.

New accounting pronouncements
-----------------------------
FAS 131

In June 1997, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards (FAS) 131, "Disclosures
about Segments of an Enterprise and Related Information." This
statement supersedes FAS 14, "Financial Reporting of Segments of a
Business Enterprise," by establishing new standards for the way that
a public business enterprise reports operating segment information in
its annual and interim financial statements.  In general, FAS 131
requires



                               Page 25
                                  
<PAGE>

               AMERITECH CORPORATION AND SUBSIDIARIES
                                  
          MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
            CONDITION AND RESULTS OF OPERATIONS (cont'd.)
                                  
New accounting pronouncements (cont'd.)
---------------------------------------
FAS 131 (cont'd)

reporting of financial information as it is used by senior company
management for evaluating performance and deciding how to allocate
resources.  The statement is effective for 1998, but need not be
applied to interim financial statements this year.  Comparative
information for earlier years must be restated.  We will adopt FAS
131 beginning with our 1998 annual report.

AICPA SOP 98-1

In March 1998, the American Institute of Certified Public Accountants
(AICPA) issued Statement of Position (SOP) 98-1, "Accounting for the
Costs of Computer Software Developed or Obtained for Internal Use."
This SOP provides authoritative guidance for the capitalization of
certain costs related to computer software developed or obtained for
our internal applications, such as:

-  external direct costs of materials and services, such as
   programming costs,
-  payroll costs for employees devoting time to the software project,
   and
-  interest costs to be capitalized.
   
Costs incurred during the preliminary project stage, as well as
training and data conversion costs, are to be expensed as incurred.
The SOP is effective for fiscal years beginning after December 15,
1998; however, earlier application is encouraged.  We plan to adopt
SOP 98-1 in the first quarter of 1999, and estimate that the impact
of adoption will be to decrease software-related expenses for
Ameritech and all of its subsidiaries by $200 million to $250 million
in the year of adoption.  We have historically expensed most computer
software costs as incurred.

FAS 133

In June 1998, the FASB issued FAS 133, "Accounting for Derivative
Instruments and Hedging Activities."  This statement provides
standardized accounting and disclosure guidance for derivative
instruments and the derivative portion of certain similar contracts.
It amends FAS 52, "Foreign Currency Translation" and FAS 107,
"Disclosures about Fair Values of Financial Instruments," and it
supersedes a number of financial accounting standards previously
issued by the FASB and several interpretations from the Emerging
Issues Task Force.

The statement requires entities that use derivative instruments to
measure these instruments at fair value and record them as assets or
liabilities on the balance sheet.  It also requires entities to
reflect the gains or losses associated with changes in the fair value
of these derivatives, either in earnings or as a separate component
of comprehensive income, depending on the nature of the underlying
contract or transaction.

FAS 133 is effective for all fiscal quarters of fiscal years
beginning after June 15, 1999, and is to be adopted as of the
beginning of the fiscal year.  At the time of adoption, all
derivative instruments are to be measured at fair value and recorded
on the balance sheet.  Any differences between fair value and
carrying amount at that time will be recorded as a cumulative effect
of a change in



                               Page 26
                                  
<PAGE>

               AMERITECH CORPORATION AND SUBSIDIARIES
                                  
          MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
            CONDITION AND RESULTS OF OPERATIONS (cont'd.)
                                  
FAS 133 (cont'd.)

accounting principle, in either net income or other comprehensive
income, as appropriate.  Adoption of this statement may or may not
have a material impact on our results of operations or financial
position in a given year, depending upon the nature and magnitude of
derivative activity that we engage in and the changes in market
conditions with respect to foreign currencies, interest rates or
other underlying values.  We have not yet quantified the impacts of
the initial adoption of FAS 133 on our results of operations or
financial condition, nor have we determined when we will implement
the new standard.

Private Securities Litigation Reform Act safe harbor statement
--------------------------------------------------------------
Some of the information presented in, or in connection with, this
report may constitute "forward-looking statements" within the meaning
of the Private Securities Litigation Reform Act of 1995 that involve
potential risks and uncertainties.  Our future results could differ
materially from those discussed here.  Some of the factors that could
cause or contribute to such differences include:

-  changes in economic and market conditions that impact the demand
   for our products and services, or for products and services by
   companies in which we have substantial investments;
-  the effects of vigorous competition in the local exchange,
   intraLATA toll, cellular, data, cable TV, directory advertising
   or security services markets;
-  federal regulatory developments that impact the
   telecommunications, security services and cable TV industries,
   and pending regulatory issues in state jurisdictions, as well as
   the outcome of any related judicial reviews;
-  the timing of and costs associated with entry into the interLATA
   long distance market;
-  the timing of, and potential regulatory or other considerations
   relating to, the consummation of our proposed merger with SBC;
-  the potential impact of issues related to year 2000 software
   compliance;
-  risks inherent in international operations, including possible
   economic, political or monetary instability, as well as the
   potential impact of year 2000 compliance and Euro currency
   conversion issues; and,
-  the impact of new technologies and the potential effect of
   delays in development or deployment of such technologies.
   
The words "expect," "believe," "anticipate," "estimate," "project,"
and "intend" and similar expressions are intended to identify forward-
looking statements.  These forward-looking statements are found at
various places throughout the Management's Discussion and Analysis
and elsewhere in this report.

You should not place undue reliance on these forward-looking
statements, which are applicable only as of November 12, 1998.  We
have no obligation to revise or update these forward-looking
statements to reflect events or circumstances that arise after
November 12, 1998 or to reflect the occurrence of unanticipated
events.

                                  
                               Page 27
                                  

<PAGE>

                Item 3 - Quantitative and Qualitative
                    Disclosures about Market Risk
                    -----------------------------
               AMERITECH CORPORATION AND SUBSIDIARIES
                                  
Information relating to market risk is included in Item 2,
Management's Discussion and Analysis of Financial Condition and
Results of Operations, in the Other Matters section under the caption
"Disclosures About Market Risk."

                                  
                               Page 28
                                  
                                      
<PAGE>

               AMERITECH CORPORATION AND SUBSIDIARIES
                                  
                                  
                                  
Part II - Other Information
---------------------------

Item 6    Exhibits and Reports on Form 8-K.
------    ---------------------------------

   (a)     Exhibits
           --------
       12   Computation of ratio of earnings to fixed charges for
            the nine months ended September 30, 1998 and 1997.
            
       27   Financial Data Schedule.
            
   (b)     Reports on Form 8-K
           -------------------
       We filed a Current Report on Form 8-K, dated July 16, 1998,
       to report our earnings for the second quarter of 1998.
       
                                  
                               Page 29
                                  

<PAGE>

                                  
                             SIGNATURES
                                  
Under the requirements of the Securities Exchange Act of 1934, an
authorized company official has signed this report on our behalf.



                                            Ameritech Corporation




Date:   November 12, 1998                   By:  /s/ Barbara A. Klein
                                            ------------------------------
                                            Barbara A. Klein
                                            Vice President and Comptroller

                                            (Duly Authorized Signatory and
                                             Principal Accounting Officer)
                                  
                               Page 30
                                  


<PAGE>

GLOSSARY

Access charges -
--------------
fees that local phone companies charge to long distance carriers for
the handling of long distance calls on our local network.

Access line -
-----------
a telephone line for voice, data or video reaching from a local phone
company to a home or business.

Advanced data services -
----------------------
services that use advanced technology to allow faster network access
to the Internet and other multimedia and data services.

Call management services -
------------------------
services that add value and convenience for phone customers, such as
call waiting, call forwarding and Caller ID.  These services are sold
to customers individually or in "packages."

Customer premises equipment (CPE) -
---------------------------------
communications equipment owned by customers, including telephones,
faxes and switches.

Dial 1 + -
--------
a feature that allows local phone customers to designate a carrier
other than the local service provider for toll calls within their
calling area by simply dialing 1 plus the telephone number.

Digital -
-------
an alternative to traditional analog communications, digital systems
transport information in computer code for improved clarity and
quality.

Federal Communications Commission (FCC) -
---------------------------------------
the federal agency responsible for regulating the interstate aspects
of telecommunications activities.

Financial Accounting Standards Board (FASB) -
-------------------------------------------
the independent body responsible for setting accounting and financial
reporting standards to be followed by U.S. business enterprises.

Gross receipts taxes -
--------------------
state and local taxes based upon the gross operating revenues earned
in a particular jurisdiction.  These taxes may be imposed on general
businesses or public utilities in lieu of other taxes.

Interconnection -
---------------
allowing a competitive local service provider to use the local phone
company's network, or elements of the network, to provide local phone
service to its customers.

Interexchange carriers (IXCs) -
-----------------------------
those companies primarily involved in providing long distance voice
and data transmission services, such as AT&T, MCI and Sprint.

Internet -
--------
the global web of networks that connects computers around the world,
providing rapid access to information from multiple sources.

Internet service providers (ISPs) -
---------------------------------
those companies providing access to the Internet and other computer-
based information networks.

Intrastate revenues -
-------------------
that portion of revenues regulated by state rather than federal
authorities.

Landline communications subsidiaries -
-----------------------------------
the subsidiaries of Ameritech engaged primarily in providing local
phone service and network access in the states of Illinois, Indiana,
Michigan, Ohio and Wisconsin.

                                  
                               Page 31
                   
<PAGE>

GLOSSARY (cont'd.)

Local access and transport area (LATA) -
--------------------------------------
the boundary within which a local telephone company may provide phone
service.  It is usually centered around a city or other identifiable
community of interest.

Local exchange carriers (LECs) -
--------------------------------------
those companies primarily involved in providing local phone service
and access to the local phone network, including Ameritech's landline
communications subsidiaries in Illinois, Indiana, Michigan, Ohio and
Wisconsin.

Operations support systems (OSS) -
--------------------------------
the databases and information used to support the provision of
telephone service to end users.

Personal communications services (PCS) -
--------------------------------------
wireless services, such as cellular phone service and two-way paging,
that use digital technology to provide enhanced call security, longer
battery life and other convenience features.

Price caps -
----------
a form of regulation that sets maximum limits on the prices that LECs
can charge for access services instead of limits on rate of return or
profits.

Productivity factor -
-------------------
a portion of the interstate price cap formula that requires LECs to
reduce the price cap based on an assumed increase in productivity.

Securities and Exchange Commission (SEC) -
----------------------------------------
the federal agency that regulates the issuance and trading of public
debt and equity securities in the United States and monitors
compliance with these regulations.

Security services -
-----------------
services that help secure people and property, including burglar and
fire alarm systems, closed circuit cameras and electronic card
access.  Most of our revenue is from the installation and monitoring
of alarm systems.

Switched minutes of use -
-----------------------
the measure of time used to bill IXC's for access to our public
switched network.

Unbundled network element -
-------------------------
any feature, function or capability used in the provision of
telecommunications service that is made available by local exchange
carriers to other telecommunications providers separate from other
network elements and for a separate fee.

Universal service -
-----------------
a concept designed to ensure access to the telecommunications network
in rural and low-income areas at affordable prices.  Funding
typically comes from urban telecommunication operators.

Voice-grade equivalent line -
---------------------
a channel or other portion of a high capacity access line that can be
used to transmit voice or data traffic.  For example, one DS1 circuit
is capable of handling 24 voice-grade and/or data lines.
                               
                               
                               Page 32